Several Councilors Worry Over Higgins Pit Solar Project
Costs and lower production dominate discussion
BAR HARBOR––According to Town Council Vice Chair Gary Friedmann, the concept for the Higgins Pit solar array came along eight years ago. It has been a long road to get the project where it is today, including having to change a section of the town’s land use ordinance to allow ground-mounted solar, and procure a $4.35 million bond approval at the June 2022 town meeting. The town has already made one payment on the bond, which was sold in August 2023.
“The bond made its first bond payment in October 2023,” said Finance Director Sarah Gilbert. The last payment is scheduled for October 15, 2043.
The Council is currently debating whether or not to finish the project.
At the January 16 Town Council meeting, councilors heard an updated presentation on the project by Chris Byers from Branch Renewable Energy and Beth Woolfolk Manager of Renewable Energy Policy and Planning (A Climate To Thrive) and some councilors worried about the project’s costs and energy output.
Friedmann said, “Climate mitigation is the only hope we have for the long term for our town, for our state, and for our nation.” He stressed that the Council’s responsibility was to make sure that projects like Higgins Pit occurred.
“That’s fine when you want to talk like that when it’s your money,” Councilor Earl Brechlin said. He went on to say that it’s the Council’s fiduciary responsibility to maximize the $4.35 million bond’s impact and climate benefits because that money came from the Bar Harbor taxpayers.
HIGHER THAN ANTICIPATED PROJECT COSTS
One part of the equation that has been slowing the project down is waiting for Versant Power to give the town an estimate for interconnecting the solar array with the regular power grid. That estimate finally came in late last year and was much higher than anticipated.
According to the report given to councilors for Tuesday night’s meeting, that cost estimate has been drastically reduced, but a final number is still not known,
“While not a final answer, we have some reason to believe that this may also result in the system impact study removing the UFLS line item of $454,346 and reducing the overall interconnection upgrades to $655,195 (originally $1,109,541).”
The report later reads,
“Even with this anticipated reduction, the “interconnection upgrades are still over budget by $178,395.”
The original road that leads to the site is not currently suitable for the type of vehicular traffic required for construction, regular operation, or fire protection. The site also contains enough wetlands that stormwater runoff and new road construction on the site is an issue. Because of this, the town is currently negotiating with an abutting neighbor for the use of some of their land.
The abutting neighbor’s property would have to be altered to allow for stormwater features and the building of the access road. Stormwater from the site would flow onto this abutting land.
According to the report, the anticipated cost for the half-mile long road is $500,000, but there will not be an accurate estimate until the spring when a formal wetland delineation study can be done. A civil engineering design using previously collected natural resource data is being used to see if a road can be built along the preferred path but this is not enough data for permit level drawings. The formal wetland study is needed for that.
Council Chair Val Peacock said, “The amount of money needed to build the road is concerning to me.”
LESS SOLAR PRODUCTION THAN ANTICIPATED AND MEETING TOWN GOALS
The Warrant for the June 2022 town meeting, Article R, stated a fairly straightforward goal of “developing a solar farm on the Higgins Pit lot to power town facilities and schools as part of a town-wide mobilization effort to combat climate change.”
Due to the price of the interconnection estimates and other issues, the output of the array has been reduced a couple of times. Originally envisioned as producing around 2 million kWh/year, that number was dropped in order to save money on the interconnection fee. At the last presentation to the Council on December 19, 2023, that production was modeled at 1,558,000 kWh/year. For this latest presentation, the production value was dropped to 1,399,000 kWh/year.
There are other negative factors involved in the solar production values. Apparently, this site it not optimal for solar production due to its configuration and tree shading. In fact, the study shows that it is “now projecting to produce approximately 20% less power than a typical ground mount solar project in Bar Harbor.”
According to studies by Branch Renewable energy and A Climate to Thrive (ACTT), the town uses approximately 2.1 million kWh/year of electricity. This means that on the very best of days, prior to the solar panels starting to degrade and lose production, the array could possibly provide approximately 67% of the town’s electricity usage.
According to Gilbert, at last year’s town meeting the stated goal for the Higgins Pit array was to cover 80% of the town’s energy costs.
The town’s Task Force on the Climate Emergency (CETF) set a goal for Higgin’s Pit in its Town of Bar Harbor Climate Action Plan. The Higgin’s Pit array falls short from that goal.
RENEWABLE ENERGY CERTIFICATES
Renewable Energy Certificates (RECs) play a big role in the Town Council’s decision.
According to the US Environmental Protection Agency, “A renewable energy certificate, or REC (pronounced: rěk, like wreck), is a market-based instrument that represents the property rights to the environmental, social, and other non-power attributes of renewable electricity generation.”
For every one megawatt-hour of electricity generated and delivered to the grid, one REC is issued. RECs are a tradeable commodity and allow the owner or purchaser to claim environmental “credits” whether or not they are generating or using the actual renewably generated electricity themselves.
The Town of Bar Harbor, as the potential generator of solar power, would have the option to keep its RECs or to sell them to help offset the costs of the Higgins Pit solar array. However, if the town sells the RECs, they cannot be used by the town toward its goal of being carbon neutral.
Currently, RECs are selling for around $30 per credit and the decision to sell the RECs or not can be a year-to-year decision according to Byers. Selling RECs is the only way to produce cash from the solar array.
PROJECTED COSTS FOR THE FIRST 15 YEARS
In addition to possibly selling the array’s RECs and offsetting the costs of the project, both initial and ongoing, the town is also eligible for a 30% Federal Investment Tax Credit (ITC) in the projected amount of $1,104,359. This amount would come to the town in electricity production year two (anticipated 2027) and is heavily depended upon in the cash flow models provided by Byers. Those models are further below but because they are hard to read the “estimated annual net” and “estimated cumulative net savings” portions for the first 15 years have been pulled out and are directly below.
The first 15 years were chosen because year 15 is the first year of positive net in one model. The second model shows positive net in year 12. Figures within parenthesis are negative amounts.
CASH FLOW MODEL WITH SELLING RECS
Year Estimated Estimated Cumulative
Annual Net Net Savings
1 ($125,056) ($125,056)
2 $988,362 $863,306
3 ($102,814) $760,492
4 ($95,994) $664,498
5 ($77,970) $586,528
6 ($65,062) $521,502
7 ($52,036) $469,466
8 ($39,975) $429,490
9 ($28,842) $400,648
10 ($16,687) $383,961
11 ($3,509) $380,452
12 $9,718 $390,170
13 $22,994 $413,163
14 $36,319 $449,482
15 $49,695 $499,177
CASH FLOW MODEL WITHOUT SELLING RECS
Year Estimated Estimated Cumulative
Annual Net Net Savings
1 ($167,032) ($167,032)
2 $947,225 $780,192
3 ($143,745) $636,447
4 ($136,721) $499,727
5 ($118,493) $381,234
6 ($105,346) $275,887
7 ($92,155) $183,732
8 ($79,893) $103,839
9 ($68,561) $35,278
10 ($56,207) ($20,929)
11 ($42,831) ($63,761)
12 ($29,408) ($93,169)
13 ($15,937) ($109,105)
14 ($2,416) ($111,522)
15 $11,153 ($100,369)
The influx of the rebate money in year two in both models shows how that sum makes the net sums much more palatable to some. In addition, the actual charts below illustrate how the model without selling RECs does go into the negative in the estimated cumulative net savings column in year ten when the rebate money is exhausted but makes a recovery in year 18.
The cash flow charts cover 30 years. The total estimated cumulative net savings for the model selling the RECs is $2,421,389 or $80,713 per year on average. The total estimated cumulative net savings for the model without selling the RECs is $1,239,739 or $41,325 per year on average.
Another important column on the cash flow charts is titled “Account Management” and is a line item for the cost of a town staff member to monitor the Versant electricity accounts (of which there would be many separate accounts) to ensure that the town is getting credited for the electricity that the array is producing. The town would not receive monetary funds for the produced electricity but would receive credits towards its usage instead. If these accounts are not monitored by a staff member and are credited inaccurately, it would upset the precariously balanced budget benefit.
WHAT IS THE BEST USE OF THE GRANT MONEY TO ACCOMPLISH GOALS
Many of the councilors pondered if Higgins Pit was the most efficient way to use the $4.35 million dollar bond towards the town’s goals of using fewer fossil fuels and of being carbon neutral.
Brechlin said that now that the council is looking at Higgins Pit only providing 50% of the town’s electricity needs, he thinks the councilors need to ask themselves if this is the project that they want to spend the bond money on.
This project is not meeting CETF goals and not generating as much electricity as initially projected and there are still unknowns such as the road. Does it make more since to look at rooftop solar on town buildings instead of the array? Councilor Matt Hochman asked. He added that the project is starting to get expensive for the output and that whatever the town moves forward with should provide the biggest environmental bang for the town’s buck.
Both Byers and Woolfolk cautioned that even for smaller projects, Versant can still charge exorbitant interconnection fees or even deny interconnection if a particular power line system cannot handle the addition electrical input from a solar array.
CETF member Brian Booher commented that the task force had not seen this data yet and that it would have been preferrable that the task force had the data and a chance to meet and make a recommendation before this presentation to the councilors. He added that this project is a big piece of what the CETF has been meeting about and trying to get accomplished for the last two and half years.
Councilor Kyle Shank said, “We will have either a tax increase or some kind of cut to the budget to fund this for the first 12 years no matter what.”
“No, that is not true,” countered Friedmann.
“But it’s cash flow negative,” said Shank, “so we have to do something with the budget to ameliorate that.”
Byers said, “I will clarify that. It is cashflow positive, you know, whatever, year 11 or something, whatever, depending upon the path you choose. You want to focus on the cumulative net though.” He then added that the 30% rebate infusion carries the town through if it sells the RECs. If the town doesn’t sell the RECs, the cash flow goes below zero.
WHO DECIDES
Brechlin asked at what point do the changes require that voters have another chance to weigh in on the project?
“It is the Council and the community that has to determine what success looks like” for this project, Town Manager James Smith said.
Speaking from the audience, Charles Sidman said, “Are we talking about something that we have committed to several years ago and now we are trying to figure out the cost and the benefits and how we actually do it or are we doing that preparatory work now and the decision about whether we do it is still in front of us?” Has the town committed to it or is that question still to come, he wondered. He thinks that’s critical for the council and the citizenry, he added.
“Do you have a thought on it? Do you have a thought about where we are?” Peacock asked Sidman.
“I would be very disappointed if we made a commitment before we did all of the preparative issues and discussion that we are having, that you are having now. You don’t know the costs; you don’t know the benefits; you don’t know how to approach it. I don’t see how you could have committed, or we could have committed, without that prep work, so I am hoping the Council will say, ‘This is a great conversation and this is the way that we are going to make the decision.’ Either as you guys on the Council or the citizenry will get a chance to,” said Sidman.
Sidman closed out public comments toward the end of this section of the council meeting by saying, “Put it before the voters, sell it to the voters, and if they so decide, that’s great, then everybody is aligned.”
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